Kenya Power tariff hike: Here’s why it’s time to shift to renewable energy

Kenya Power's proposed tariff hike of at least 20% has stirred debate and raised concerns over the impact it will have on households and businesses in the country. The Energy and Petroleum Regulatory Authority's approval of the tariff increase is seen as a step towards aiding Kenya Power in its turnaround efforts. However, critics argue that the move will further burden household budgets and exacerbate the already high cost of doing business in Kenya. Ken Gichinga, Chief Economist at Mentoria Economics, weighed in on the matter, shedding light on the complexities facing Kenya Power in the current energy landscape. Gichinga highlighted the need for a shift towards privatization and renewable energy as key strategies for revitalizing the sector. The conversation around Kenya Power's future has sparked discussions on the company's viability in a rapidly evolving market landscape. With the company issuing its third consecutive profit warning and facing challenges in profitability and sustainability, the question of privatization has gained traction. Gichinga emphasized the necessity of private sector involvement in driving efficiency, competitiveness, and innovation within the energy sector. Drawing parallels to the successful privatization of Kenya Post and Telecommunications in the 1990s, Gichinga suggested that a similar restructuring may be needed to unlock Kenya Power's full potential and enhance service delivery. The shift towards renewable energy sources, such as solar and geothermal power, has also gained momentum in Kenya. The country has seen a surge in funding and interest in solar energy projects, supported by international partners like the United States. Despite the technological challenges associated with mass adoption of solar energy, the growing emphasis on renewable sources signals a positive shift towards a more sustainable energy mix. Kenya's abundant geothermal resources further offer promising opportunities for diversifying the energy sector and reducing dependency on traditional sources. The push towards a more diversified and competitive energy market aligns with the broader goal of enhancing energy security and resilience in the face of evolving energy needs and global trends. As Kenya Power navigates the complexities of a rapidly changing energy landscape, the calls for privatization and renewable energy integration are likely to shape the company's future trajectory. Balancing the need for profitability and sustainability with affordability and accessibility will be crucial in ensuring a stable and efficient energy sector for Kenya's growing economy.